§ Mr. BoswellTo ask the Secretary of State for Work and Pensions if he will make a statement on the time limits for scheme minimum funding requirements. [21442]
§ Mr. McCartneyThe minimum funding requirement (MFR) was introduced from April 1997, and requires pension schemes to which it applies to correct underfunding within specified periods. During the transitional period, which ends on 5 April 2002, schemes which are underfunded on the MFR basis have until 5 April 2003 to bring funding up to 90 per cent. of the MFR level, and until 5 April 2007 to bring funding up to 100 per cent. of the MFR level.
We are currently consulting on a set of draft regulations which will introduce changes to the current MFR in advance of its replacement. One of the proposed changes will extend these periods to allow three years for schemes to reach the 90 per cent. level, and 10 years to reach the 100 per cent. level. The consultation ends on 10 December, and we plan to introduce new arrangements before April next year.